New Incentives for Multifamily Properties in Opportunity Zones Announced

On May 9, HUD announced new incentives for multifamily property owners applying for certain Federal Housing Administration (FHA) loans in Opportunity Zones. HUD will reduce FHA mortgage insurance application fees for multifamily market-rate transactions and for transactions that meet HUD’s definition of affordable or broadly affordable when the property is located in an Opportunity Zone. Established by the Tax Cuts and Jobs Act of 2017, Opportunity Zones are designated low-income census tracts that can provide incentives to encourage investment within their community. To date, 8,761 communities in all 50 states, Washington D.C., and five territories have been designated as Opportunity Zones. 

HUD is also improving the procedure for processing applications by designating HUD Senior Underwriters to process applications.

 

Proposed Rule Requires Verification of Eligible Immigration Status for HUD Assistance

Tomorrow, HUD will publish in the Federal Register a proposed rule titled “Housing and Community Development Act of 1980: Verification of Eligible Status.” This proposed rule purports to change how families with mixed immigration statuses receive prorated HUD assistance. Comments are due 60 days after publication.

Current Proration of HUD Assistance

Currently, families with a mixed status may apply for assistance by declaring that each member of the family is 1) a U.S. citizen or eligible non-citizen; or 2) decide not to contend eligible immigration status (and not submit verification documentation) for that member. Family members that declare themselves eligible must provide acceptable evidence of immigration status. Verification is provided through the Systematic Alien Verification for Entitlements (SAVE) system–administered by the Department of Homeland Security (DHS). The system saves the information of noncitizens. Assistance is then prorated such that only citizen-members (or eligible non-citizen-members) of families receive funding (excluding those who do not contend their eligible immigration status).

Proposed Changes

This proposed rule would make two changes to the current system. First, the proposed rule would require that all family members (except those over the age of 62) have their immigration status verified through SAVE (i.e., family members would no longer have the option to not contend their eligible immigration status). Under most covered programs, those who have not submitted evidence of eligible immigration status will be required to do so at their first regular reexamination.

Second, the proposed rule would specify that individuals that do not have a verified eligible immigration status may not serve as the head of household or spouse–i.e., the holder of the lease.

The pre-publication copy of the proposed rule can be found here.

The published in the Federal Register version can be found here (available 5/10/2019).